CHAPTER 6 Inland Intermodal Terminals and Freight Logistics Hubs Gerard de Villiers Arup (Pty) Ltd., Johannesburg, South Africa. Abstract Transport planning and land use management are intricately engaged in the spa- tial design of nodes and links from origin to destination in the supply chain. The focus of this chapter is on inland facilities and it starts with defi ning terminology and concepts, followed by a framework for the planning of these facilities. The typical planning hierarchy used in supply chain management with the four levels of strategic, structural, functional and operational is used. The design of inland terminals and logistics hubs are normally done on structural level although much input is needed from the respective logistics functions such as transport, ware- housing and materials handling on a functional level. Some operational aspects of inland intermodal terminals and freight logistics hubs such as logistics fl ows, conceptual design, value adding activities and the role of stakeholders are cov- ered. A South African view on inland terminals and logistics hubs from the National Freight Logistics Strategy and the National Development Plan is also presented. Keywords: Aerotropolis, dry port, hinterland, hub, inland port, intermodal, logis- tics activity zone, logistics campus, logistics cluster, logistics park, port, port of entry and terminal. 1 Introduction 1.1 Setting the scene Transport planning and land use management are intricately engaged in the spatial design of nodes and links from origin to destination in the supply chain. Christo- pher [1] states that leading-edge companies have realised that the real competition is not company against company but rather supply chain against supply chain. WIT Transactions on State of the Art in Science and Engineering, Vol 86, © 2015 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) doi:10.2495/978-1-84566-077-2/006 124 LAND USE MANAGEMENT AND TRANSPORTATION PLANNING This implies that the location of the nodes and links are important to ensure that logistics costs are minimised in the supply chain. The nodes consist mainly of intermodal terminals and freight logistics hubs which provide intermediate locations where logistics value is added to the move- ment of containers and freight in bulk or break-bulk. The links usually consist of road, rail, inland waterways or air that connect the respective nodes. The nodes and links form the mobility fabric that is of particular importance on freight logistics corridors that connect sea ports with hinterland origins and destinations. The chapter starts with defi nitions and concepts related to the establishment and operation of inland intermodal terminals and freight logistics hubs. The next sec- tion suggests a suitable framework for the planning of these facilities and then operational aspects receive attention. The numerous stakeholders that should be engaged to ensure that the planning is integrated within the broader regional land use plans are discussed and product fl ows examined to understand the purpose of the facilities. A typical layout and conceptual operations of an intermodal facility are also provided. South Africa has exceptionally high logistics costs and in recent years took the trouble in developing a national freight logistics strategy as well as in approving a national development plan that highlights the importance of effi cient supply chains. The contents of these planning guidelines are briefl y discussed as well as comments provided on the freight logistics industry in South Africa. The subtitle of this textbook refers to an international perspective and the next section of this chapter investigates inland intermodal facilities in Europe, North America and Asia. The status and use of the facilities are covered as well as exam- ples discussed of facilities that could be used as benchmark case studies. The char- acteristics of successful logistics clusters and the role of the government are also explained. The fi nal part of this chapter provides information on a South African case study of the Durban—Free State—Gauteng corridor where multiple inland intermodal terminals and freight logistics hubs have been identifi ed as strategic integrated projects that are currently prioritised and supported by the national government. A suitable summary is provided in the conclusion and a list of references indi- cates the sources of information explored. 1.2 Definitions Inland intermodal facilities and freight logistics hubs are the nodes where logistics value is added to the movement of containers and freight in bulk or break-bulk. It makes sense to start with defi ning logistics and Fig. 1 provides a diagram which is useful in explaining the concept. The inbound side is referred to as ‘supply management’ (originally called mate- rials management) and includes the sourcing of raw materials, mostly handled in bulk and in large loads by rail or sea vessels. These raw materials are converted to work-in-progress in production facilities and transformed into fi nished goods that WIT Transactions on State of the Art in Science and Engineering, Vol 86, © 2015 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) INLAND INTERMODAL TERMINALS AND FREIGHT LOGISTICS HUBS 125 Figure 1: Logistics management. Source: Adapted from De Villiers et al. [2]. are moved to central or regional distribution centres or local warehouses and depots. The outbound journey is referred to as ‘distribution management’ (origi- nally called physical distribution) and includes storage and transport to the fi nal customer or consumer. The typical logistics functions or elements include transport, warehousing, inventory management, information systems, procurement, materials handling, order management, customer service, packaging and reverse logistics. Supply chain management is the integration of all these logistics functions or elements from the suppliers of your suppliers upstream to the customers or con- sumers of your customers downstream. This implies integration across companies from origin to destination in the supply chain to ensure seamless and cost effective movement through the supply chain. The most cost effective supply chain network is where total logistics costs are minimised, which implies usually in the case of centralised distribution, higher transport costs, but lower warehousing and inventory carrying costs, and in the case of decentralised distribution, lower transport costs but higher warehousing and inventory carrying costs. The intermediary locations where logistics value is added include transport ter- minals, freight logistics hubs, logistics clusters and related facilities. Table 1 pro- vides defi nitions for the most common terms. It is clear from the list of defi nitions that the appropriate name for a facility such as an inland intermodal terminal or freight logistics hub should relate to the activities and functions performed at the facility. However, there seems to be no standardisation of terminology and not all facilities are accordingly defi ned. In conclusion of this section, it is important to mention that the development of an inland intermodal terminal to a full-fl edged integrated inland container port is WIT Transactions on State of the Art in Science and Engineering, Vol 86, © 2015 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) 126 LAND USE MANAGEMENT AND TRANSPORTATION PLANNING Table 1: Defi nitions. Term Defi nition Source Aerotropolis Analogous in shape to the traditional metropolis Aerotropolis made up of a central city and its rings of [3] commuter-heavy suburbs, the aerotropolis consists of an airport city and outlying corridors and clusters of aviation-linked businesses and associated residential development. Dry port A dry port is an inland intermodal terminal directly Wikipedia [4] connected by road or rail to a seaport and operating as a centre for the transhipment of sea cargo to inland destinations. In addition to their role in cargo transhipment, dry ports may also include facilities for storage and consolidation of goods, maintenance for road or rail cargo carriers and customs clearance services. The location of these facilities at a dry port relieves competition for storage and customs space at the seaport itself. Hinterland The remote areas of a country away from the coast Oxford or the banks of major rivers. Dictionaries Online [5] Hub A central airport or other transport facility from Oxford which many services operate. Dictionaries Online [5] Inland port The term inland port is used in two different but Wikipedia [6] related ways to mean either a port on an inland waterway or an inland site carrying out some functions of a seaport. Intermodal Involving two or more different modes of Oxford transport in conveying goods. Dictionaries Online [5] Logistics A zone where industrial or economic activity takes Spanish activity place, kept relatively separate from the other State Ports zone port zones and generally devoted to the logistics Agency [7] of sea-based cargoes. Logistics Special type of logistics park with tightly Sheffi [8] campus coordinated operations by a single entity. Logistics Amorphous agglomeration of companies and Sheffi [8] cluster facilities with logistics-intensive operations with fuzzy borders and no central management. Logistics Clearly defi ned ownership and geographic prop- Sheffi [8] park erty boundaries. (Continued) WIT Transactions on State of the Art in Science and Engineering, Vol 86, © 2015 WIT Press www.witpress.com, ISSN 1755-8336 (on-line) INLAND INTERMODAL